SUPPLEMENT  TO  TREASURY   DECISIONS 

(T.  D.  2833) 


TREASURY  DEPARTMENT 

UNITED  STATES  INTERNAL  REVENUE 


W-S,    lukytof  fcvwiwe  5*rvft«,- 

REGULATIONS  48 

RELATING  TO  THE 

EXCISE  TAXES 

ON 

WORKS  OF  ART  AND 
JEWELRY 


UNDER 


Sections   902  and    905   of   the 

REVENUE  ACT  OF  1918 


WASHINGTON 

GOVERNMENT  PRINTING  OFFICE 

1919 


4  CONTENTS. 

Page. 

25.  Watches  and  clocks 13 

26.  Opera  glasses,  lorgnettes,  marine  glasses,  field  glasses  and  binoculars-  13 

L'T.  Second-hand  articles 13 

2S.  Repairs 13 

\n.M  IMS  i  BA  riVE  I  i:"\  isiONS. 

29.  Exemption  of  export  sale T 13 

30.  Proof  of  exportation I4 

31.  Trade  with  possessions  of  the  United  States 15 

32.  Transfer  of  burden  of  tax I5 

33.  Return  and  payment  of  tax 16 

34.  Returns  by  agents 17 

35.  Credits   and   refunds T IT 

3G.  Fractional   part  of  cent 18 

37.  Penalties • 1§ 

3S.  Promulgation 19 


EXCISE  TAXES  ON  WORKS  OF  ART  AND  JEWELRY. 


GENERAL  PROVISIONS. 

Article  1.  Basis  of  tax.— The  tax  is  measured  by  the  price  for 
which  the  article  is  sold.  It  is  on  the  actual  sales  price  of  the  goods, 
and  not  on  the  list  price,  where  that  differs  from  the  sales  price.  If 
the  price  of  a  taxable  article  is  increased  to  cover  the  tax,  the  tax  is 
on  such  increased  price.  Where,  however,  the  tax  is  billed  as  a  sepa- 
rate item,  such  amount  need  not  be  included  in  the  price  of  the  article 
in  computing  the  tax.  The  tax  is  payable  in  respect  to  a  sale  made 
whether  or  not  the  purchase  price  is  actually  collected.  A  discount 
for  cash  or  other  discount  made  subsequently  to  the  sale  can  not  bo 
deducted  in  computing  the  price  for  the  purpose  of  the  tax.  Where, 
however,  articles  are  sold  over  a  period  of  time  under  an  agreement 
for  a  quantity  rebate,  the  tax,  if  originally  computed  on  the  gross  price, 
may  be  adjusted  in  the  return  for  the  month  in  which  the  price  is 
finally  determined.  Commissions  to  agents  and  other  expenses  of 
sale  are  not  deductible  from  the  price.  If  articles  are  sold  and  the 
delivery  charges  to  point  of  delivery  are  paid  by  the  purchaser  as  a 
specific  item,  or  if  they  are  sold  delivered  at  a  sum  less  delivery 
charges  to  be  paid  by  the  purchaser,  such  charges  need  not  be  in- 
cluded as  a  part  of  the  price  of  the  goods;  but  if  the  vendor  sells 
goods  at  a  delivered  price  and  pays  the  delivery  charges,  he  is  not 
entitled  to  make  any  deduction  on  account  of  the  inclusion  in  the 
price  of  such  charges. 

Art.  2.  Rescission  of  sales. — If  articles  sold  are  returned  and  the 
sale  entirely  rescinded,  no  tax  is  payable,  and  if  paid  it  may  be  credited 
against  the  tax  included  in  a  subsequent  monthly  return.  See 
Art.  35.  If  part  only  of  articles  sold  at  one  time  is  returned, 
and  credit  or  rebate  allowed  by  the  vendor  therefor,  the  portion 
of  the  tax  to  be  credited  will  be  only  the  proportion  of  the 
total  tax  paid  which  the  amount  allowed  as  credit  or  rebate  bears  to 
the  total  sale  price  of  all  the  articles.  If  an  article  is  sold  and  there- 
after exchanged  for  another  article  of  a  higher  price,  the  purchaser 
paying  the  difference,  the  vendor  should  pay  the  tax  on  the  second  sale, 
but  may  take  as  a  credit  against  such  tax  the  proportion  of  the  tax 
paid  on  the  returned  article  which  the  amount  allowed  as  a  credit 
for  the  return  of  such  article  on  the  second  sale  bears  to  the  amount 

of  the  purchase  price  in  the  case  of  the  first  sale. 

5 


6  EXCISE   TAXES   ON   WORKS   OF    AET   AND   JEWELRY. 

Art.  3.  Tax  payable  by  vendor. — The  tax  is  to  be  paid  by  the 
vendor  on  all  sales  made  direct  by  him  or  through  an  agent,  whether 
a  sales  agent,  broker?  or  auctioneer.  Where  a  vendor  consigns  ar- 
ticles, retaining  ownership  in  them  until  they  are  disposed  of  by  the 
consignee,  the  vendor  must  pay  the  tax  upon  all  such  articles  sold 
by  the  consignee. 

Art.  ■!.  When  tax  attaches. — The  tax  attaches  when  the  article  is 
sold:  that  is  to  say,  when  the  title  to  it  passes  from  the  vendor  to 
the  purchaser.  When  title  passes  is  a  question  of  fact,  dependent 
upon  the  intention  of  the  parties  as  gathered  from  the  contract  of 
sale  and  the  attendant  circumstances.  Where  goods  are  segregated 
from  other  goods  owned  by  the  vendor  and  it  is  the  intention  of  both 
the  vendor  and  the  purchaser  at  the  time  the  goods  are  segregated 
that  they  shall  then  belong  to  the  purchaser,  the  title  will  be  pre- 
sumed to  pass  at  such  time.  In  the  absence  of  any  intention  to  the 
contrary  the  title  is  presumed  to  pass  upon  delivery  of  the  article 
to  the  purchaser  or  to  a  carrier  for  the  purchaser.  In  the  case  of 
a  conditional  sale,  where  the  title  is  reserved  until  payment  of  the 
purchase  price  in  full,  the  tax  attaches  (a)  upon  such  payment,  or 
(b)  when  title  passes  if  before  completion  of  the  payments,  or  (<?) 
when,  before  completion  of  the  payments,  the  dealer  disposes  of  the 
sale  by  charging  off  by  any  method  of  accounting  he  may  adopt,  the 
unpaid  portion  of  the  contract  price. 

Art.  5.  Giving  of  premiums. — The  giving  of  so-called  "-pre- 
miums" in  return  for  wrappers,  labels,  coupons,  trading  stamps,  or 
other  scrip,  delivered  or  sold  in  connection  with  the  sale  of  a  com- 
modity, is  a  sale  within  the  meaning  of  section  902  and  section  905 
if  the  premium  is  within  the  class  of  articles  enumerated  in  those 
sections.  In  such  cases  the  tax  attaches  at  the  time  title  in  the  pre- 
mium passes  to  the  person  receiving  it  in  exchange  for  such  scrip, 
and  is  to  be  computed  on  the  fair  market  value  of  the  premium  at 
such  time. 

Art.  6,  Sale  to  the  United  States  or  a  State.— The  tax  applies  to 
articles  enumerated  in  sections  902  and  905  when  sold  to  the  United 
States.  Articles  sold  to  a  State  or  political  subdivision  thereof  for 
use  in  carrying  on  its  governmental  operations  are  not  subject  to 
the  tax. 

WORKS  OF  ART. 

Sec.  S02.  That  there  shall  be  levied,  assessed,  collected,  and  paid  upon 
sculpture,  paintings,  statuary,  art  porcelains,  and  bronzes,  sold  by  any 
person  other  than  the  artist,  a  tax  equivalent  to  10  per  centum  of  the 
priee  for  which  so  sold.  This  section  shall  not  apply  to  the  sale  of  any 
such  article  to  an  educational  institution  or  public  art  museum. 


EXCISE   TAXES   ON   WORKS   OF   ART  AND   JEWELRY.  7 

Art.  7.  Effective  date. — The  tax  applies  to  all  sales  made  on  or 
after  February  25,  1919. 

Art.  8.  Taxable  sales. — The  tax  is  on  any  sale  of  the  articles 
enumerated  other  than  a  sale  by  the  actual  artist  or  to  an  educational 
institution  or  public  art  museum.  The  tax  attaches  whether  the  sale 
is  made  directly  or  through  an  agent.  If  made  through  an  agent  the 
tax  is  payable  by  the  owner,  but  the  agent  may  make  return  and 
pay  the  tax  for  the  owner.  A  receiver  conducting  a  business  under 
court  order  is  liable  to  the  tax  upon  articles  sold  by  him.  When  a 
person  other  than  the  artist  consigns  articles,  retaining  ownership 
in  them  until  they  are  disposed  of  by  the  consignee,  such  person  must 
pay  the  tax  upon  all  such  goods  sold  by  the  consignee. 

Art.  9.  Taxable  sales :  Examples. — The  tax  applies  to  all  sales  from 
private  owner  to  private  owner,  or  from  private  owner  to  dealer, 
or  from  dealer  to  dealer,  or  from  dealer  to  private  oAvner,  and 
the  tax  to  be  paid  upon  each  such  sale  is  to  be  reckoned  upon  the 
full  amount  of  the  price  for  which  the  article  was  sold.  For  example, 
a  picture  is  sold  by  a  private  owner  to  a  dealer  for  $10,000;  the 
private  owner  must  pay  a  tax  of  10  per  cent  of  $10,000,  or  $1,000. 
This  picture  is  thereafter  sold  to  another  dealer  for  $15,000;  the  first 
dealer  must  pay  a  tax  of  10  per  cent  of  $15,000,  or  $1,500.  The 
second  dealer  in  turn  sells  the  picture  to  a  third  dealer  for  $20,000 ; 
the  second  dealer  must  pay  a  tax  of  10  per  cent  on  $20,000,  or  $2,000. 
The  third  dealer  sells  the  painting  to  a  private  collector  for  $25,000 ; 
the  third  dealer  must  pay  a  tax  of  10  per  cent  of  $25,000,  or  $2,500. 
Lastly  the  private  owner  sells  it  to  another  private  owner  for  $30,000 ; 
the  former  must  pay  a  tax  of  10  per  cent  of  $30,000,  or  $3,000. 

Art.  10.  Sales  by  the  artist. — Sales  by  the  artist  are  not  taxable. 
By  "artist"  is  meant  the  individual  who  by  his  own  hands,  com- 
pletely or  as  to  the  important  part  so  far  as  the  article's  artistic 
merit  is  concerned,  produces  the  article.  The  artist's  sale  may  be 
made  directly  or  through  a  dealer,  commission  merchant,  or  other 
person.  The  exempt  sale  is  only  the  original  sale  by  the  artist.  If 
the  artist  regains  title  to  an  article  and  again  sells  it,  such  sale  is 
taxable. 

SCULPTURE. 

Art.  11.  Articles  taxed:  Sculpture. — The  term  "sculpture"  means 
any  production  (whether  antique  or  modern,  and  Avhelher  original, 
replica,  copy,  or  reproduction)  which  is  cut  or  carved  by  hand  from 
marble,  stone,  alabaster,  agate,  crystal,  jade,  lapis  lazuli,  or  other 
semiprecious  stone,  terra  cotta,  ivory,  bone,  woqd,  clay,  wax,  metal, 
or  any  other  substance,  and  which  is  of  such  a  character  that  the  use 
to  which  under  general  custom  or  ordinary  usage  it  should  be  put 
(irrespective  of  the  use  to  which  the  purchaser  intends  to  put  it),  is 


S  EXCISE   TAXES   OB    WORKS   OT   ART  AND  JEWELRY. 

entirely  or  principally  an  ornamental  or  decorative  one  as  distin- 
guished from  a  useful  or  utilitarian  one.  The  following  list,  not 
intended  to  be  exhaustive,  is  given  to  show  the  class  of  articles  em- 
braced within  this  definil  ion,  viz :  Statues,  statuettes,  figures,  figurines, 
groups,  busts,  haul  or  bas  reliefs,  plaques,  pedestals,  vases,  flower 
bowls  or  holders,  jardinieres,  brackets,  fountains,  sundials,  book 
ends,  paper  weights,  cabinet  pieces  or  curios,  and  the  numerous  arti- 
cles included  within  the  term  bric-a-brac,  when  such  articles  are  cut 
or  carved  by  hand.  The  term  "sculpture"  shall  not  be  understood 
to  include  (a)  such  articles  as  are  in  the  nature  of  material,  work,  or 
labor  furnished  in  connection  with  the  erection  or  construction  of  a 
building  and  which  form  an  integral  part  thereof,  or  (b)  cut  glass- 
ware or  engravings  on  metal,  wood,  shell,  stone,  or  other  substance, 
or  (c)  furniture,  altars,  candlesticks,  chandeliers,  railings,  gates, 
doors,  or  other  articles  designed  primarily  for  a  useful  purpose. 

PAINTINGS. 

Art.  12.  Articles  taxed :  Paintings. — The  term  "  paintings  "  means 
any  pictures,  images,  likenesses,  scenes,  designs,  or  sketches,  wholly 
or  in  part  in  oil,  mineral,  water,  or  other  colors  on  canvas  or  other 
textile,  wood,  paper,  metal,  plaster,  or  other  material,  (a)  whether 
antique  or  modern,  (b)  whether  originals,  replicas,  copies,  or  repro- 
ductions, and  (c)  whether  or  not  intended  for  reproduction  by  print- 
ing or  other  processes.  The  term  "  paintings  "  shall  not  be  under- 
stood to  include  (1)  such  as  are  in  the  nature  of  work  or  labor  fur- 
nished in  connection  with  the  erection  or  construction  of  a  building 
and  which* form  an  integral  part  thereof;  (2)  furniture,  windows, 
tableware,  toilet  articles,  glove,  handkerchief,  candy,  or  other  fancy 
boxes,  menu,  place,  greeting,  and  similar  cards,  stationery,  candle- 
sticks, signs,  placards,  desk  fittings,  and  other  articles  of  utility 
when  the  same  are  ornamented  or  decorated  with  oil,  mineral,  water, 
or  other  colors;  (3)  such  as  are  produced  wholly  or  in  part  by  sten- 
ciling, printing,  or  other  mechanical  process;  and  (4)  pastels  or 
drawings.  The  term  "  drawings  "  as  used  in  this  article  shall  in- 
clude only  pictures,  images,  likenesses,  scenes,  designs,  or  sketches 
produced  by  means  of  lines. 

STATUARY. 

Art.  13.  Articles  taxed :  Statuary. — -The  term  "  statuary  "  means  any 
production  (whether  antique  or  modern  and  whether  original,  re- 
plica, copy,  or  reproduction)  cut,  carved,  or  otherwise  wrought  by 
hand  from  marble,  stone,  alabaster,  agate,  crystal,  jade,  lapis  lazuli, 
or  other  semiprecious  stone,  terra  cotta,  ivory,  bone,  wood,  clay,  wax, 
metal,  or  other  substance,  when  such  production  is  a  representation 


EXCISE   TAXES   OX   WORKS   OF   ART   AXD   JEWELRY.  9 

in  the  round  of  the  human  or  animal  form  (irrespective  of  size), 
whether  real,  mythical,  fabulous,  or  allegorical.  The  term  "  statuary  " 
shall  not  be  understood  to  include  (a)  such  productions  as  are  in  the 
nature  of  material,  work,  or  labor  furnished  in  connection  with  the 
erection  or  construction  of  a  building  and  which  form  an  integral 
part  thereof,  (b)  dolls  or  toys,  or  (o)  such  productions  as  are  de- 
signed for  a  primarily  useful  purpose. 

ART  PORCELAINS. 

Art.  1-1.  Articles  taxed :  Art  porcelains. — The  term  "  art  porcelains  " 
means  that  class  of  articles  covered  by  sculpture  and  statuary  as  de- 
fined in  articles  11  and  13  by  whatever  process  made  when  such 
articles  are  made  wholly  or  in  chief  value  (a)  of  any  ceramic  pro- 
duction of  translucent  ware,  of  hard  or  soft  paste,  whether  vitrified 
or  semivitrified,  by  whatever  name  known;  or  (b)  of  that  which  is 
commonly  or  commercially  known  as  porcelain,  in  either  case, 
whether  or  not  decorated,  colored,  or  ornamented,  whether  modern  or 
antique,  and  whether  originals,  replicas,  copies,  or  reproductions, 
which  are  of  such  a  character  that  the  use  to  which  under  general 
custom  or  ordinary  usage  they  should  be  put  (irrespective  of  the  use 
to  which  the  purchaser  intends  to  put  them)  is  entirely  or  princi- 
pally an  ornamental  or  decorative  one  as  distinguished  from  a  useful 
or  utilitarian  one.  The  term  "  art  porcelains "  shall  not  be  uncles- 
stood  to  include  (a)  such  articles  as  are  in  the  nature  of  material, 
work,  or  labor  furnished  in  connection  with  the  erection  or  construc- 
tion of  a  building  and  which  form  an  integral  part  thereof,  or  (b) 
tableware  or  other  articles  designed  for  a  primarily  useful  purpose. 

BRONZES. 

Art.  15.  Articles  taxed:  Bronzes. — The  term  "bronzes"  means  that 
class  of  articles  covered  by  "sculpture"  and  "statuary"  as  defined 
in  articles  11  and  13  by  whatever  process  made,  when  such  articles 
■are  made  wholly  or  in  chief  value  of  that  substance  which  is  com- 
monly or  commercially  known  as  bronze,  whether  such  articles  are 
modem  or  antique,  and  whether  originals,  replicas,  copies,  or  repro- 
ductions, which  are  of  such  a  character  that  the  use  to  which  under 
general  custom  or  ordinary  usage  they  should  be  put  (irrespective 
of  the  use  to  which  the  purchaser  intends  to  put  them)  is  entirely  or 
principally  an  ornamental  or  decorative  one  as  distinguished  from  a 
useful  or  utilitarian  one.  The  term  "bronzes"  shall  not  be  under- 
stood to  include  (a)  architectural  bronzes,  (b)  such  articles  as  are 
in  the  nature  of  material,  work,  or  labor  furnished  in  connection 
with  the  erection  or  construction  of  a  building  and  which  form  an 
integral  part  thereof,  (c)  medals,  memorial  or  commemorative  tab- 
114150°— 19 2 


10  EXCISE  TAXES   ON   WORKS  OF  ART  AND   JEWELRY. 

lets,  or  (d)  such  articles  aa  arc  designed  for  a  primarily  useful 
purpose.  The  sale  to  an  artist  by  a  foundry  of  a  casting  made  from 
the  artist's  model  is  not  subject  to  the  tax. 

FRAMES. 

Art.  L6.  Articles  taxed:  Frames. — If  a  taxable  article  is  sold  in 
a  frame,  the  tax  attaches  to  the  price  for  which  both  the  'article 
and  the  frame  are  sold.  If,  however,  the  article  is  sold  without  the 
frame,  the  tax  applies  only  to  the  price  at  which  the  article  itself 
is  sold.  The  frame,  however,  if  sold  separately,  may  be  taxable  under 
section  904  or  section  905  of  the  Revenue  Act  of  1918. 

JEWELRY. 

Sec.  905.  That  on  and  after  April  1,  1919,  (hero  shall  bo  levied, 
assessed,  collected,  and  paid  (in  lieu  of  the  tax  imposed  by  Mibdivision 
(e)  of  section  GOO  of  the  Revenue  Act  of  191^)  upon  all  articles  commonly 
or  commercially  known  as  jewelry,  whether  real   ox  imitation^;    pearls, 

precious  and  semiprecious  stones,  and  imitations  thereof;  articles  made 
of,  or  ornamented,  mounted,  or  lifted  with,  precious  metals  or  imita- 
tions thei'eof  or  ivory  (not  including  surgical  instruments);  watches; 
clocks:  opera  glasses;  lorgnettes;  marine  glasses;  field  glasses ;  and  bin- 
oculars; upon  any  of  the  above  when  sold  by  or  for  a  dealer  or  his  estate 
for  consumption  or  use,  a  tax  equivalent  to  5  per  centum  of  the  price  for 
which  so  sold. 

Art.  17.  Effective  date. — The  tax  is  effective  as  to  all  sales  made 
on  or  after  April  1, 1919,  superseding  the  manufacturer's  tax  imposed 
by  section  600  of  the  Revenue  Act  of  1917. 

Art.  18.  Use  of  terms. — For  the  purpose  of  the  tax  and  as  used 
in  these  regulations,  the  term  "  dealer"  means  any  individual,  part- 
nership, association,  or  corporation  engaged  in  the  business  of  selling 
for  profit  any  of  the  enumerated  articles  to  a  purchaser  for  consump- 
tion or  use.  and  the  estate  of  such  a  dealer.  Thus,  a  dealer  may  be  a 
manufacturer,  jobber,  wholesaler,  retailer,  mail-order  house,  install- 
ment house,  trustee  in  bankruptcy,  receiver,  pawnbroker,  or  peddler, 
if  the  sale  is  for  consumption  or  use;  but  a  casual  sale,  not  in  the 
course  of  trade  or  business,  by  an  individual  of  any  of  the  enumerated 
articles,  does  not  constitute  the  vendor  a  "  dealer  "  within  the  mean- 
ing; of  section  905.  An  auctioneer  or  broker  is  a  dealer  within  the 
meaning  of  the  act  in  respect  to  all  sales  made  by  him  of  articles  in 
which  he  has  title,  but  not  in  respect  to  articles  which  he  is  selling  as 
an  agent. 

Aut.  19.  Articles  taxpaid  under  other  acts. —  (a)  The  tax  is  on 
the  sale  by  or  for  a  dealer  or  his  estate  when  any  of  the  enumerated 
articles  are  sold  for  consumption  or  use,  regardless  of  whether  or  not 
a  tax  under  any  other  law,  or  any  other  tax  under  this  act,  has  been 


EXCISE  TAXES   ON   WORKS   OF   ART   AND   JEWELRY.  11 

previously  paid  on  such  articles.  (5)  Articles  in  respect  to  which  ihe 
manufacturers  excise  tax  imposed  by  section  600  of  the  revenue  act  of 
1917  has  been  paid  are  taxable  under  section  005  when  sold  for  con- 
sumption or  use  by  or  for  a  dealer  or  his  estate,  (c)  The  tax  imposed 
upon  the  manufacturer's  sale  of  jewelry,  under  section  600  of  the  rev- 
enue act  of  1917,  is  not  a  "  corresponding-  tax  "  to  the  tax  imposed  by 
section  905  for  the  purpose  of  section  1312  of  the  act. 

Art.  20.  Consumption  or  use. — An  article  is  sold  "  for  consump- 
tion or  use  "  within  the  meaning  of  section  905  of  the  act  if  it  is 
sold  for  any  other  purpose  than  to  be  sold,  leased,  or  otherwise  dis- 
posed of  for  profit,  whether  or  not  after  change  in  form  by  process  of 
manufacture. 

Unless  the  purchaser  is  a  wholesaler,  retailer,  or  manufacturer  cus- 
tomarily engaged  in  the  business  of  selling  or  further  manufacturing 
the  articles  in  respect  to  which  the  applicability  of  the  tax  is  in  ques- 
tion, the  sale  to  such  purchaser  will  be  deemed  to  be  for  consumption 
or  use,  unless  the  contrary  is  clearly  shown. 

COMMON   OR  COMMERCIAL   JEWELRY. 

Art,  21.  Jewelry. — The  following  articles  are  taxable  as  jewelry: 

(1)  Articles  to  be  worn  on  the  person  or  apparel  for  purpose  of 
adornment,  which  according  to  general  custom  or  ordinary  usage  are 
worn  so  as  to  be  displayed,  such  as  brooches,  rings,  chains,  cuff  but- 
tons, necklaces,  fobs,  and  shoe  buckles.  Such  articles  are  taxable 
regardless  of  the  substance  of  which  made  (except  as  provided  in  sub- 
division (1)  of  article  22),  and  regardless  of  their  utilitarian  value. 

The  term  "  worn  on  the  person  "  as  used  in  this  paragraph-  does  not 
include  articles  to  be  carried  in  the  hand  or  hung  over  the  arm.  such 
as  bags  or  purses. 

(2)  Articles  to  be  carried  in  the  hand,  or  hung  on  the  arm.  or 
carried  or  worn  concealed  on  the  person,  whether  in  pocket  or  bag  or 
under  the  outer  garment,  such  as  cigarette  cases,  eyeglass  cases,  pen- 
cils, powder  boxes,  garter  buckles,  purses  or  hand  bags.  Such  articles 
are  taxable  as  jewelry  only  if  made  of  or  ornamented,  mounted  or 
fitted  with,  pearls,  precious  or  semiprecious  stones,  or  imitations 
thereof;  but  if  so  made,  ornamented,  mounted  or  fitted,  they  are  (ax- 
able  regardless  of  their  utilitarian  value.    See  also  Article  24. 

(8)  Articles  not  taxable  under  the  following  Articles  may  be  tax- 
able by  reason  of  being  articles  commonly  or  commercially  known  as 
jewelry,  real  or  imitation.  It  should  he  carefully  noted  that  the 
rulings  in  this  article  are  only  as  to  articles  taxable  as  ,/'  w<  Iry.  Arti- 
cles which  are  not  taxable  as  jewelry  may  be  taxable  under  Articles 
•s.'>  or  24.  Thus  a  cigarette  case,  if  made  of,  or  ornamented,  mounted, 
or  fitted  with,  a  precious  metal  or  imitation  thereof,  although  not 


12  EXCISE  TAXES   OX   WORKS   OF   ART   AND   JEWELRY. 

taxable  under  this  article  is  taxable  under  Article  24.  It  should  also 
be  noted  that  the  examples  given  in  this  article  are  not  intended  to 
be  exhaustive,  but  merely  illustrative. 

ARTICLES  NOT  TAXABLE. 

Art.  22.  Articles  not  taxable. —  (1)  The  following  articles  of  per- 
sonal adornment  are  not  taxable  under  section  1)05,  unless  orna- 
mented, mounted  or  fitted  with  pearls,  precious  or  semiprecious 
stones,  or  imitations  thereof:  (a)  Articles  made  of  textiles  or 
feathers:  (h)  hat  trimmings  (not  including  hat  pins)  ;  (c)  shoe 
trimmings  (not  including  buckles  made  of  precious  metal  or  imita- 
tions thereof,  or  ivory)  ;  {d)  buttons  ordinarily  worn  permanently 
attached  to  wearing  apparel. 

(•2)  Articles  used  as  ornaments  for  wearing  appafel  are  taxable 
if  coming  within  the  classification  of  subdivision  (1)  or  (2)  of 
Article  21,  or  if  within  the  provisions  of  any  of  the  following 
Articles. 

PEARLS,  STONES,   AND   IMITATIONS. 

Art.  23.  Pearls,  precious  and  semiprecious  stones  and  imitations 
thereof. — The  tax  attaches  to  the  sale  of  all  pearls  and  precious  or 
semiprecious  stones,  whether  real  or  imitation,  cut  or  uncut,  whether 
or  not  drilled,  mounted,  or  matched,  and  whether  or  not  temporarily 
or  permanently  strung,  and  whether  with  or  without  clasps. 

ARTICLES   MADE    OF    PRECIOUS    METALS    OR   IMITATIONS    OR   IVORY. 

Art.  24.  Articles  made  of,  or  ornamented,  mounted  or  fitted  with 
precious  metals  or  imitations  thereof  or  ivory. — The  term  "precious 
metals"  includes  silver,  gold,  platinum  and  all  metals  more  valuable 
than  these.  The  term  "imitations  thereof"  includes  only  platings 
or  alloys  of  any  of  the  above  materials. 

The  following  articles  are  not  taxable  under  the  clause  of  section 
905  construed  in  this  article:  (1)  Articles  made  of  imitation  ivory; 
(2)  surgical  instruments;  (3)  articles  merely  ornamented  or  over- 
laid with  gold  or  silver  leaf  or  paint,  such  as  picture  frames,  books, 
and  Christinas  cards. 

Glassware,  china,  pottery  and  like  articles  are  only  taxable  if 
ornamented,  mounted  or  fitted  with  precious  metals  or  imitations 
thereof,  but  are  not  taxable  when  ornamented  with  gold  or  silver  leaf 
or  paint. 

It  should  be  carefully  noted,  however,  that  the  articles  above 
enumerated,  although  not  taxable  as  "  articles  made  of,  or  orna- 
mented, mounted,  or  fitted  with,  precious  metals  or  imitations  thereof 
or  ivory,"  may  be  taxable  as  jewelry.    Thus  a  hatpin  with  a  head  of 


EXCISE  TAXES   ON  WORKS   OF  ART  AND  JEWELRY.  18 

imitation  ivory  is  taxable  as  jewelry.    For  articles  taxable  as  jewelry 
see  Article  21. 

WATCHES  AND   CLOCKS. 

Art.  25.  Watches  and  clocks. — Watch  or  clock  movements  sold  sepa- 
rately are  taxable.  Watch  or  clock  cases  sold  separately  are  tax- 
able when  made  of,  or  ornamented,  mounted  or  fitted  with  precious 
metals  or  imitations  thereof  or  genuine  ivory.  Watches  and  clocks 
sold  complete  are  taxable  regardless  of  the  substance  of  which  made. 
Watch  or  clock  cases  and  movements  sold  separately  but  intended 
to  be  used  together  are  taxable. 

OPERA  GLASSES,  ETC. 

Art.  26.  Opera  glasses,  lorgnettes,  marine  glasses,  field  glasses  and 
binoculars. — The  enumeration  in  the  statute  includes  only  portable 
instruments.  Instruments  of  the  character  enumerated,  which  by 
reason  of  their  size  or  weight  are  ordinarily  mounted  upon  tripods 
or  other  bases,  are  not  taxable. 

SECOND-HAND   ARTICLES. 

Art.  27.  Second-hand  articles. — Articles  coming  within  the  enumera- 
tion of  section  905  are  not  exempt  from  taxation  when  sold  by  a 
dealer  for  consumption  or  use  at  second-hand  or  after  being  used, 
but  are  taxable  on  the  price  for  which  sold. 

REPAIRS. 

Art.  28.  Repairs. — Ordinary  repairs  which  do  not  increase  (he 
value  of  the  article  repaired  are  not  taxable,  but  repairs  involving 
the  addition  of  precious  metals  or  imitations  thereof  or  ivory  are 
taxable  upon  the  price  of  the  added  parts,  which  will  be  presumed  to 
be  the  price  charged  for  the  job  unless  the  contrary  is  shown. 

ADMINISTRATIVE  PROVISIONS. 

EXPORTS. 

Rkc.  1310.  (c)  Under  such  rules  and  regulations  as  (he  Commissioner 
with  the  approval  of  the  Secretary  may  prescrihe,  the  taxes  imposed  under 
the  provisions  of  Titles  VI,  VII,  or  IX  shall  nol  apply  in  respect  to 
articles  sold  or  Leased  for  export  and  in  duo  course  so  exported.  Under 
such  rules  and  regulations  the  amount  of  any  internal-revenue  lax 
erroneously  or  illegally  collected  in  respect  to  exported  articles  may  he 
refunded  to  the  exporter  of  the  article,  instead  of  to  the  manufacturer,  if 
the  manufacturer  waives  any  claim  for  the  amount  so  to  he  refunded. 

Art.  29.  Exemption  of  export  sale. — The  tax  does  not  attach  to  the 
sale  of  an  article  which  is  either  (1)  Shipped  direct  to  a  foreign 
destination  by  the  manufacturer  himself,  or  (2)  both  {a)  sold  by  him 
for  export  and  (5)  in  due  course  so  exported  by  the  purchaser. 
.Where  a  manufacturer  at    the  time   an   article   is  sold   or  shipped 


14  EXCISE  TAXES   ON   "WORKS   OF  ART  AND   JEWELRY. 

(whichever  is  prior)  has  in  his  possession  an  order  or  contract  of 
sale  showing  in  writing  (1)  that  the  manufacturer  is  to  export  the 
article,  or  (2)  that  the  purchaser  is  buying  the  article  in  order  to 
export  it  prior  to  its  being  used  or  subjected  to  further  manufacture, 
there  is  a  presumption  that  the  sale  of  the  article  is  exempt  from 
tax,  as  an  export  sale,  and  the  manufacturer  may,  for  a  period  of  six 
months  from  the  date  of  sale  or  shipment  (whichever  is  prior),  rely 
on  such  presumption.  This  presumption  becomes  conclusive  upon 
the  manufacturer's  receiving  and  attaching  to  such  order  or  con- 
t  ract,  before  the  termination  of  such  period  of  six  months,  due 
"proof  of  exportation"  (see  Art.  30)  of  such  article.  On  the  other 
hand,  if,  within  such  period  of  six  months,  the  manufacturer  has  not 
received,  and  attached  to  such  order  or  contract,  such  "proof  of 
exportation,"  then  the  presumption  that  such  sale  is  an  export 
sale  disappears,  and  the  manufacturer  shall  include  a  tax  on  the 
sale  of  such  article  in  his  return  for  the  month  in  which  such 
period  of  six  months  expires.  The  order  or  contract  of  sale  and  the 
"proof  of  exportation"  must  be  preserved  by  the  manufacturer  in 
such  a  way  as  to  be  readily  accessible  for  inspection  by  internal- 
revenue  officers.  ~No  sale  shall  be  considered  to  be  exempt  from  tax 
under  section  1310  (c)  of  the  act,  unless  its  character  as  an  export 
sale  has  been  established  in  accordance  with  the  above  provisions. 

Art.  30.  Proof  of  exportation. — By  the  term  "  proof  of  exporta- 
tion" is  meant:  (1)  An  affidavit  made  by  the  exporter  containing 
the  following  information:  The  name  and  address  of  the  manu- 
facturer, the  name  and  address  of  the  exporter  (who,  if  not  the 
manufacturer,  must  be  a  person  who  has  purchased  direct  from  the 
manufacturer),  the  respective  dates  of  the  sale  (or  shipment,  which- 
ever is  prior),  and  exportation  of  the  article,  the  price  for  which 
purchased,  the  fact  that  the  article  has  been  exported  by  the  manu- 
facturer or  original  purchaser  without  having  been  used  or  sub- 
jected to  further  manufacture,  the  name  of  the  port  of  foreign 
destination,  the  name  and  address  of  the  carrier  issuing  the  export 
bill  of  lading,  and  any  further  information  necessary  to  identify 
the  article  sold  with  the  article  exported;  and  (2)  attached  to  such 
affidavit  a  copy  of  the  export  bill  of  lading,  or  a  certificate  by  the 
agent  or  representative  of  the  export  carrier  showing  the  exporta- 
tion of  the  article,  or  if  exported  by  parcel  post,  a  copy  of  the 
certificate  of  mailing. 

TRADE  WITH  POSSESSIONS  OF  THE  UNITED  STATES. 

Sec.  1304.  That  there  shall  be  levied,  collected,  and  paid  in  the  United 
States,  upon  articles  coming  into  the  United  States  from  the  Virgin 
Islands,  a  tax  equal  to  the  internal-revenue  tax  imposed  in  the  United 
States  upon  like  articles  of  domestic  manufacture;  such  articles  shipped 
from  such  islands  to  the  United  States  shall  be  exempt  from  the  payment 


EXCISE   TAXES   ON   WORKS   OF   ART   AND   JEWELRY.  15 

of  any  tax  imposed  by  the  internal-revenue  laws  of  such  Islands:  Pro- 
vided, That  there  shall  be  levied,  collected,  and  paid  in  such  islands,  upon 
articles  imported  from  the  United  States,  a  tax  equal  to  the  internal- 
revenue  tax  imposed  in  such  islands  upon  like  articles  there  manufac- 
tured ;  and  such  articles  going  into  such  islands  from  the  United  States 
shall  be  exempt  from  payment  of  any  tax  imposed  by  the  internal- 
revenue  laws  of  the  United  States. 

Art.  31.  Trade  with,  possessions  of  United  States. — A  sale  which 
results  in  the  shipment  of  articles  into  the  United  States  from  the 
Virgin  Islands  is  taxable  to  the  same  extent  as  a  sale  of  articles  within 
the  United  States.  Articles  going  into  the  Virgin  Islands  from  the 
United  States  are  free  from  tax  in  the  United  States.  The  same 
rules  apply  to  trade  with  Porto  Rico  and  the  Philippine  Islands. 
See  section  1000  of  the  revenue  act  of  1917  and  Section  V  of  the  act 
of  August  4,  1909,  as  amended  by  Section  IV  subdivision  C,  of  the 
act  of  October  3, 1913.  The  tax  attaches,  however,  to  articles  shipped 
to  other  possessions  of  the  United  States,  including  the  Canal  Zone. 

TRANSFER   OF  BURDEN   OF   TAX. 

Spc.  1312  (2).  If  (ft.)  any  person  has  prior  to  September  3,  1918,  made 
a  bona  fide  contract  with  a  dealer  for  the  sale  *  *  *  after  the  tax 
takes  effect,  of  any  article  in  respect  to  which  a  tax  is  imposed  under 
Title  *  *.  *  IX  *  *  *  or  under  this  subdivision,  and  in  respect  to 
which  no  corresponding  tax  was  imposed  by  the  revenue  act  of  1917, 
and  (b)  such  contract  does  not  permit  the  adding,  to  the  amount  to  be 
paid  under  such  contract,  of  the  whole  of  the  tax  imposed  by  this  act,  then 
the  vendee  *  *  *  shall,  in  lieu  of  the  vendor  *  *  *  pay  so  much 
of  the  tax  imposed  by  tins  act  as  is  not  so  permitted  to  be  added  to  the 
contract  price.  If  a  contract  of  the  character  above  described  was  made 
with  any  person  other  than  a  dealer,  no  tax  shall  be  collected  under 
this  act. 

Art.  3*2.  Transfer  of  burden  of  tax. —  (a)  In  the  case  of  articles  tax- 
able under  section  902  if  A  (who  is  not  the  artist)  made  a  con- 
tract of  the  character  described  in  the  statute  with  B,  a  dealer,  be- 
fore September  3,  1918,  the  liability  for  tax  on  sales  made  on  or  after 
February  25,  1919,  in  pursuance  of  such  contract,  is  on  B,  with  only 
a  duty  on  A  to  collect  and  pay  it  to  the  collector.  If  in  the  above  case 
B  also  made  before  September  3,  1918,  a  contract  of  the  character  de- 
scribed with  O,  another  dealer,  the  liability  for  such  tax.  thus  imposed 
on  B,  is  transferred  from  B  to  C,  B  being  obligated  only  to  collect  the 
tax  from  C  and  pay  it  over  to  A  for  payment  to  the  collector.  If, 
however,  anj'  person  made  before  September  3,  1918,  a  contract  of 
the  character  described  with  any  person  other  than  a  dealer,  no  tax 
is  due  in  respect  to  the  sale  under  such  contract. 

(5)  In  the  case  of  articles  taxable  under  section  905,  if  a  dealer, 
before  September  3,  1918,  made  a  contract  of  the  character  described 
in  the  statute  for  the  sale  on  or  after  April  1,  1919,  of  any  of  the 


1G  EXCISE  TAXES   ON   WORKS   OF  ART  AND  JEWELRY. 

enumerated  articles  for  consumption  or  use,  the  sales  made  in  pur- 
suance of  such  contract  arc  not  taxable.     (See  art.  19  (c).) 

RETURN   AND   PAYMENT   OF   TAX. 

Sec.  903.  That  every  person  liable  for  any  tax  Imposed  by  section 
*  *  *  f)Q2  *  *  *)  shall  make  monthly  returns  under  oath  in  dupli- 
cate and  pay  the  taxes  *  *  *  to  the  collector  for  the  district  in 
which  is  located  the  principal  place  of  business.  Such  returns  shall  con- 
tain such  information  and  be  made  at  such  times  and  in  such  manner 
as  the  Commissioner,  with  the  approval  of  the  Secretary,  may  by  regula- 
tions prescribe. 

The  tax  shall,  without  assessment  by  the  Commissioner  or  notice  from 
the  collector,  be  due  and  payable  to  the  collector  at  the  time  so  fixed  for 
filing  the  return.     *     *     * 

Sec.  905.  *     *     * 

Every  person  selling  any  of  the  articles  enumerated  in  this  section 
shall  make  returns  under  oath  in  duplicate  (monthly  or  quarterly  as 
the  Commissioner,  with  the  approval  of  the  Secretary,  may  prescribe) 
and  pay  the  taxes  imposed  in  respect  to  such  articles  by  this  section  to 
the  collector  for  the  district  in  which  is  located  the  principal  place  of 
business.  Such  returns  shall  contain  such  information  and  be  made  at 
such  times  and  in  such  manner  as  the  Commissioner,  with  the  approval 
of  the  Secretary,  may  by  regulations  prescribe. 

The  tax  shall,  without  assessment  by  the  Commissioner  or  notice  from 
the  collector,  be  due  and  payable  to  the  collector  at  the  time  so  fixed  for 
filing  the  return. 

Sec.  1312.  (4)  The  taxes  payable  by  the  vendee  *  *  *  under  this 
section  shall  be  paid  to  the  vendor  at  the  time  the  sale  *  *  *  is  con- 
summated and  collected,  returned,  and  paid  to  the  United  States  by  such 
vendor     *     *     *     in  the  same  manner  as  provided  in  section  502. 

Sec  1309.  That  the  Commissioner,  with  the  approval  of  the  Secretary, 
Is  hereby  authorized  to  make  all  needful  rules  and  regulations  for  the 
enforcement  *  *  *  of  this  act  (and)  *  *  *  may  by  regulations 
provide  that  any  return  required  by  Titles  *  *  *  IX  *  *  *  to  be 
under  oath  may,  if  the  amount  of  the  tax  covered  thereby  is  not  in  excess 
of  $10,  be  signed  or  acknowledged  before  two  witnesses  instead  of  under 
oath. 

Art.  33.  Return  and  payment  of  tax. — In  accordance  with  the  sec- 
tions above  set  forth  and  section  502,  every  person  liable  for  the 
tax  in  respect  to  the  sale  of  any  of  the  articles  enumerated  in  sec- 
tion 902  or  section  905  must  make  monthly  returns  under  oath 
in  duplicate  (except  that  if  the  amount  of  tax  covered  thereby 
is  not  in  excess  of  $10  such  returns  may  be  signed  and  acknowl- 
edged before  twro  witnesses  instead  of  under  oath),  and  pay'  the 
taxes  imposed  on  such  articles  to  the  collector  of  internal  revenue 
for  the  district  in  which  his  principal  place  of  business  is  located. 
If  he  has  no  place  of  business,  return  should  be  made  to  the  col- 
lector for  the  district  in  which  he  resides.  An  itinerant  dealer 
should  make  return  and  pay  the  tax  to  the  collector  of  the  district 
where  the  sales  are  made.     The  returns  shall  be  made  on  Form 


EXCISE   TAXES    CX    WOKKS   OF   ART   AND   JEWELRY.  17 

728A.  Instructions  for  preparing-  the  return  will  be  found  on  the 
back  of  the  form.  The  returns  are  to  be  rendered  and  the  tax  paid 
on  or  before  the  last  dav  of  each  month  covering  the  transactions 
of  the  preceding  month.  The  first  return  under  section  902  must 
cover  all  transactions  from  February  25,  1919,  to  March  31,  1919, 
both  inclusive,  and  is  to  be  made  on  or  before  May  31,  1919.  The 
first  return  under  section  905  must  cover  all  transactions  from  April 
1,  1919.  to  April  30,  1919,  both  inclusive,  and  is  to  be  made  on  or 
before  May  31,  1919.  The  books  of  every  person  liable  to  the  tax 
shall  be  open  at  all  times  for  inspection  by  examining  internal- 
revenue  officers. 

RETURNS  BY  AGENTS. 

At;t.  84.  Returns  by  agents. —  Every  auctioneer,  agent,  factor, 
broker,  dealer,  or  other  person  selling  any  of  the  articles  enu- 
merated in  section  902,  as  agent  for  the  owner,  unless  such  owner  is 
the  artist,  shall  make  monthly  return  under  oath  to  the  collector  for 
the  district  in  which  his  principal  place  of  business  is  located,  stat- 
ing as  to  each  article  sold  for  any  such  owner  the  name  and  address 
of  such  owner,  the  date  and  amount  of  the  sale,  and  a  brief  descrip- 
tion of  the  article. 

CREDITS  AND   REFUNDS. 

Sec.  1310.  (a)  That  in  the  case  of  any  overpayment  or  overeollection  of 
any  tax  imposed  by  *  *  *  Title  IX,  the  person  making  such  over- 
payment or  overeollection  may  take  credit  therefor  against  taxes  due 
upon  any  monthly  return,  and  shall  make  refund  of  any  excessive  amount 
collected  by  him  upon  proper  application  by  the  person  entitled  thereto. 

(b)  Wherever  in  this  act  a  tax  is  required  to  be  paid  by  the  purchaser 
to  the  vendor  at  the  time  of  a  sale,  and  such  sale  is  made  on  credit,  then, 
under  regulations  prescribed  by  the  commissioner,  with  the  approval  of 
the  Secretary,  the  tax  may,  at  the  option  of  the  vendor,  be  returned  and 
paid  by  him  to  (he  United  .Stales  as  if  paid  to  him  by  the  purchaser  at 
the  time  of  the  sale,  and  in  such  case  the  vendor  shall  have  a  right  of 
action  in  any  court  of  competent  jurisdiction  against  the  purchaser  for 
the  amount  of  the  tax  so  returned  and  paid  to  the  United  States. 

Art.  85.  Credits  and  refunds. — If  a  person  overpays  the  tax  due 
with  one  monthly  return,  he  may  take  credit  for  the  overpayment 
against  the  tax  due  with  a  succeeding  return.  If  under  section 
1312  of  the  statute  or  otherwise,  he  similarly  overcollects  the  tax. 
he  shall  refund  the  overeollection  to  the  purchaser.  If  in  a  case 
uruler  section  1312  he  sells  on  credit,  he  shall  make  return  of  the 
tax  at  the  time  of  the  sale,  but  may  defer  collection  of  it  from  the 
purchaser,  (See  Art.  1.)  For  the  procedure  with  reference  to 
claims  for  refund  see  sections  3220  and  3225  of  the  Revised  Statutes, 
as  amended  by  section  1316  of  the  Revenue  Act  of  L918,  and  Regu- 
lations No.  14  (revised). 


18  EXCISE  TAXES   ON   WORKS   OF  ART  AND  JEWELRY. 

FRACTIONAL  PART  OF  CENT. 

Sec.  1313.  That  in  the  payment  of  any  tax  under  this  act  not  payable 
by  stamp  a  fractional  part  of  a  cent  shall  be  disregarded  unless  it 
amounts  to  one-half  cent  or  more,  in  which  case  it  shall  be  increased  to 
1  cent. 

Art.  30.  Fractional  part  of  cent. — In  computing  the  tax  a  fractional 
part  of  a  cent  shall  be  disregarded  unless  it  amounts  to  one-half  cent 
or  more,  in  which  case  it  shall  be  increased  to  a  full  cent. 

PENALTIES. 

Art.  37.  Penalties. — Section  317G  of  the  United  States  Revised 
Statutes,  as  amended  by  section  1317  of  the  Revenue  Act  of  191S. 

Sec  3176.  *  *  *  In  case  of  any  failure  to  make  and  file  a  return 
or  list  within  the  time  prescribed  by  law,  or  prescribed  by  the  Commis- 
sioner of  Internal  Revenue  or  the  collector  in  pursuance  of  law,  the  Com- 
missioner of  Internal  Revenue  shall  add  to  the  tax  25  per  centum  of 
its  amount,  except  that  when  a  return  is  filed  after  such  time  and  it  is 
shown  that  the  failure  to  file  it  was  due  to  a  reasonable  cause  and  not 
to  willful  neglect,  no  such  addition  shall  be  made  to  the  tax.  In  case 
a  false  or  fraudulent  return  or  list  is  willfully  made,  the  Commissioner 
of  Internal  Revenue  shall  add  to  the  tax  50  per  centum  of  its  amount. 

The  amount  so  added  to  any  tax  shall  be  collected  at  the  same  time 
and  in  the  same  manner  and  as  part  of  the  tax  unless  the  tax  has  been 
paid  before  the  discovery  of  the  neglect,  falsity,  or  fraud,  in  which  case 
the  amount  so  added  shall  be  collected  in  the  same  manner  as  the  tax. 

Sections  903,  905,  1308  and  1319,  of  the  Revenue  Act  of  1918 : 

Sec.  903.  *  *  *  If  the  tax  is  not  paid  when  due,  there  shall  be 
added  as  part  of  the  tax,  a  penalty  of  5  per  centum,  together  with  inter- 
est at  the  rate  of  1  per  centum  for  each  full  month,  from  the  time  when 
the  tax  became  due. 

Sec.  905.  *  *  *  If  the  tax  is  not  paid  when  due,  there  shall  be 
added  as  part  of  the  tax  a  penalty  of  5  per  centum,  together  with  inter- 
est at  the  rate  of  1  per  centum  for  each  full  month,  from  the  time  when 
the  tax  became  due. 

Sec.  1308.  (a)  That  any  person  required  under  Titles  IX  *  *  * 
to  pay  *  *  *  any  tax,  or  required  by  law  or  regulations  made  under 
authority  thereof  to  make  a  return  or  supply  any  information  for  the 
purposes  of  the  computation,  assessment  or  collection  of  any  such  tax, 
who  fails  to  pay  *  *  *  any  such  tax,  make  any  such  return,  or  sup- 
ply any  such  information  at  the  time  or  times  required  by  law  or  regula- 
tion shall  in  addition  to  other  penalties  provided  by  law,  be  subject  to  a 
penalty  of  not  more  than  $1,000. 

(b)  Any  person  who  willfully  refuses  to  pay  *  *  *  any  such  tax, 
make  such  return  or  supply  such  information  at  the  time  or  times  re- 
quired by  law  or  regulation,  or  who  willfully  attempts  in  any  manner 
to  evade  such  tax,  shall  be  guilty  of  a  misdemeanor,  and  in  addition  to 
other  penalties  provided  by  law  shall  be  fined  not  more  than  $10,000  or 
imprisoned  for  not  more  than  one  year,  or  both,  together  with  the  cost 
of  prosecution. 


EXCISE   TAXES   OX   WOEKS   OF   ART   AND   JEWELRY.  19 

(c)  Any  person  who  willfully  refuses  to  pay  *  *  any  such  tax 
shall,  in  addition  to  other  penalties  provided  by  law,  he  liable  to  a  pen- 
alty of  the  amount  of  the  tax  evaded,  or  not  paid,  *  *  to  be  as- 
sessed and  collected  in  the  same  manner  as  taxes  are  assessed  and  col- 
lected :  Provided,  however,  that  no  penalty  shall  be  assessed  under  this 
subdivision  for  any  offense  for  which  a  penalty  may  be  assessed  under 
authority  of  section  317G  of  the  Revised  Statutes,  as  amended     *     *     *. 

(d)  The  term  "person"  as  used  in  this  section  includes  an  officer  or 
employee  of  a  corporation  or  a  member  or  employee  of  a  partnership,  who 
as  such  officer,  employee,  or  member  is  under  a  duty  to  perform  the  act 
in  respect  of  which  the  violation  occurs. 

Sec.  1319.  That  whoever  in  connection  with  the  sale  *  *  *  or  offer 
for  sale  *  *  *  of  any  article,  or  for  the  purpose  of  making  such 
sale  *  *  *  makes  any  statement,  written  or  oral,  (1)  intended  or 
calculated  to  lead  any  person  to  believe  that  any  part  of  the  price  at 
which  such  article  is  sold  *  *  *  or  offered  for  sale  *  *  *  con- 
sists of  a  tax  imposed  under  the  authority  of  the  United  States,  or  (2) 
ascribing  a  particular  part  of  such  price  to  a  tax  imposed  under  the 
authority  of  the  United  States,  knowing  that  such  statement  is  false  or 
that  the  tax  is  not  so  great  as  the  portion  of  such  price  ascribed  to  such 
tax,  shall  be  guilty  of  a  misdemeanor  and  upon  conviction  thereof  shall 
be  punished  by  a  line  of  not  more  than  $1,000  or  by  imprisonment  not  ex- 
ceeding one  year,  or  both. 

AUTHORITY  FOR  REGULATIONS. 

Sec.  1309.  That  the  Commissioner,  with  the  approval  of  the  Secretary, 
is  hereby  authorized  to  make  all  needful  rules  and  regulations  for  the 
enforcement  of  the  provisions  of  this  act. 

Art.  3.8.  Promulgation. — In  pursuance  of  the  statute  the  foregoing 
regulations  are  hereby  made  and  promulgated  and  all  rulings  in- 
consistent herewith  are  hereby  revoked. 

Daniel  C.  Roper, 
Commissioner  of  Internal  Revenue. 
'  Approved  May  2.  1919 : 

11  5 

J.  H.  MOYLE, 

Acting  Secretary  of  the  Treasury. 


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